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Delivering a 21 st century railway

Delivering a 21 st century railway. Anna Walker, Chair, ORR National Rail Conference: Cracking the Capacity Problem , 5 July 2012. A time of challenge. Britain’s railways at a critical moment Strong and steady growth Safety Performance But… Costs too high Inflation-plus fare rises

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Delivering a 21 st century railway

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  1. Delivering a 21st century railway Anna Walker, Chair, ORR National Rail Conference: Cracking the Capacity Problem, 5 July 2012

  2. A time of challenge • Britain’s railways at a critical moment • Strong and steady growth • Safety • Performance But… • Costs too high • Inflation-plus fare rises • Government financial position And… • Need to attract investment in UK infrastructure

  3. A moment of opportunity • Government support for infrastructure and rail • Major Investment • Crossrail • Electrification • HS2 • Network Rail devolution/alliances • Franchising reform • Biggest programme since privatisation • High Level Output SpecificationsScotland: JuneEngland and Wales: July • Periodic Review: CP5: 2014-19

  4. Government policy Government vision in Command Paper: • Spur to economic growth • Improving the passenger experience • Connecting regional/local communities • Take freight off our roads • But set us all challenge of: • Whole industry working • Significant efficiencies

  5. New capacity Government investment • Existing commitments • Crossrail • Thameslink • Electrification projects • HS2 • HLOS Initial Industry Plan • City region package • Strategic Rail Network But we must also maximise value of existing capacity/network

  6. PR13 • Formally began in March • Will establish • Network Rail’s funding and outputs • And wider incentive/financial framework • Welcome industry’s commitment to lower end McNulty savings (£2.5bn per year) • But will be pushing to see efficiencies towards the higher end (£3.5bn)

  7. CP5: taking a longer term view • CP5 is building block for CP6 • Key objectives for CP5: • Devolution • By Network Rail route • To encourage local action/efficiencies • Provide comparative information • Leading to route-based price controls • And alignment/more focussed incentives: • Alliances/benefits • Without discrimination • Revisiting Schedules 4&8

  8. Key Objectives for CP5 (continued) • Development of system operator role • An industry function • To maximise and co-ordinate network use • A healthy freight sector • More cost reflective pricing • Moving to route based charges • Considering a scarcity charge • Improving effectiveness of volume (capacity) incentives • Greater transparency/information • By route • Whole sector/all players • For passengers • Of subsidy

  9. CP5: other enablers • Sector-wide incentives • Supply chain • ROSCOs? • Network Rail: best practice asset management • Investment for innovation/ efficiency • Competition • Where beneficial to passengers and funders • Localism • Support Government’s approach • Regulation can facilitate this

  10. PR13 – a critical year Over next 12 months we will take HLOS’s and develop our draft determination for CP5

  11. Role of regulation • Command Paper: ORR • To drive relentlessly for efficiencies • To help improve the passenger experience • To move towards pursuing whole industry efficiency • Issue is not about organisations but what achieves objectives for sector most effectively • We will focus on issues of importance to passengers eg • passenger information • performance • ticketing complexity • And consider cross sector monitoring is crucial

  12. Closing remarks • A good time for rail – sustained growth and continuing Government investment • Command Paper, Network Rail and franchise reform and PR13 present a huge opportunity to transform and deliver challenge of a 21st Century railway • New capacity is planned • But we must use existing capacity more effectively – nationally and locally • Whole sector working and efficiencies are crucial to this • Next 12 months crucial. We want to work with you to get this transformation right.

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